Friday, May 1, 2009
Greetings Member-Partners and Friends!
Today, I am pleased to inform you that joining Altus-Helyar – Canada's largest and oldest cost consulting and development cost management firm – in providing independent valuation services to League's IGW REIT, is Colliers International Realty Advisors (www.colliers.com).
Colliers International is a global real estate services firm with 11,000 employees in 293 offices in 61 countries. Colliers has a large complement of accredited appraisers and consultants specializing in office, retail, industrial, land, hospitality and multi-residential. Its team of consultants is one of the largest in Canada.
Colliers' services will save 10% in the cost of the revaluation of the pool, while still providing what we have wanted for our Member-Partners all along: an independently certified Pricing Net Asset Value (NAV) for the "Class A" IGW REIT Units, which is based upon an independent valuation of the entire REIT portfolio.
Independent certification of the IGW REIT Unit Value
Barring unforeseen delays due to the simultaneous completion of the audit and updating of the IGW REIT's Offering Memorandum, later today – May 1, 2009 – the Pricing NAV, based on Colliers' independent valuation, will be made available in the Updates section of our website: www.league.ca/updates. All new subscriptions will then be based on that new unit value – until the next re-valuation on August 1, 2009.
Essential services: Colliers International
Now, on a semi-annual basis, Colliers International will collect, analyze, and maintain all the valuation data on all the properties managed by League. In the case of the IGW REIT LP, it will use this data, in conjunction with interim management-prepared, and year end financial statements audited by KPMG, to determine the current Pricing Net Asset Value, and thereby the current Unit price of the "Class A" IGW REIT Units.
This will assure current and potential Members-Partners that a specialized, and completely independent party is providing the annual NAV calculation and reviewing all the quarterly unit re-valuations.
Additionally, for each asset, Colliers will provide property value assessment services including:
- annual appraisal reports: all properties will be analyzed annually using a consistent valuation method – income approach and market comparison, as appropriate for each property – and all the reports will be consolidated into a summary document, along with commentary as to the total aggregate value of the entire portfolio as well as the fair market value of the entire REIT. In addition, Colliers will re-value properties selected for interim quarterly Pricing NAV adjustments;
- summary of the total aggregate value of all assets: this is used to complete the actual Pricing NAV calculation. It provides the total value for the portfolio as a going concern. Using this value, in conjunction with the financial statements prepared in the same format as our year-end statements audited by KPMG, the IGW REIT's unit value can now be determined based on independently verified information.
Essential services: Altus-Helyar
Altus-Helyar, meanwhile, will continue to provide the following services:
- replacement cost estimates for insurance purposes: this will ensure that our assets are never under-insured, and that the tenants are charged exactly what is needed to recoup insurance costs;
- property tax assessment reviews: the aim is to reduce property taxes if possible. This is good both for the tenants and League, as it decreases operating costs for both parties. More on this below.
What these services cost
While the net cost to Member-Partners is zero (tenants pay for these services), switching to Colliers International will result in a 10% cost savings. We at League believe in the principle of positive interdependence. And, especially in this economy, what's good for our tenants is good for our Member-Partners too.
How the NAV is calculated
The Pricing NAV will continue to be calculated as follows:
Pricing NAV = (fair market value of assets) - (aggregate amount of the liabilities of the REIT) - (the paid up capital and unpaid distributions on issued Income Priority Units)
*For a complete definition, see the IGW REIT's Offering Memorandum
Fulfilling our promise
This is yet another of many steps League is taking towards the transparency and accountability associated with a public issuer, and also towards elevating the IGW REIT to an institutional-quality investment.
Please remember that you need not wait until the next revaluation. You can subscribe at any time, and begin receiving a tax-efficient distribution payment the following month. We hope you will join us in the IGW REIT . . . and tell your friends too.
As always, we invite you to call or write with any questions or comments regarding this or any other matter. My partner Adam Gant and I – along with all our staff – look forward to speaking with you and helping you and your family to achieve Intergenerational Wealth™ as a Member-Partner in League.
Warmest regard,
Emanuel.
Emanuel F. Arruda, Founding Partner
League Assets Corp.
Learn, Earn, Live, Give.™
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"Life is not accountable to us. We are accountable to life.."
- Denis Waitley -
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